Zendesk’s annual research has highlighted the potential for businesses to drive business success with a focus on customer experiences as 94% of Indian consumers report making purchase decisions based on the quality of customer service they receive. The global Zendesk (NYSE: ZEN) Customer Experience (CX) Trends Report 2022 shows that a majority of Indian businesses surveyed (88%) agree that there is a direct link between customer service and business performance. Despite this, many Indian consumers (84%) feel like customer service is an afterthought for businesses, indicating a gap between consumer expectation and company actions.
Customer expectations grew over the past year as 88% of Indian consumers say their customer service standards have increased over the last 12 months. CX is a determining factor for retention and loyalty as 85% of Indian customers are willing to switch brands after one bad experience. Indian businesses recognize the need for having a standout customer service team, with 61% saying that it has an impact on retention. It is perhaps why 65% of Indian companies expect funding for their customer service teams to rise by 25% in the next 12 months.
“Businesses cannot afford to take a transactional approach to their relationships with their customers. Customer service is now a key differentiator, but this year’s report reveals some gaps exist between expectation and delivery,” said Adrian McDermott, Chief Technology Officer, Zendesk. “Customers are noticing this gap and voting with their business – and that’s perhaps the clearest signal to businesses that change needs to happen, and fast.”
“Businesses need an institution-wide shift where investments into tools and processes that enhance CX become a priority. The insights are clear on the competitive advantage and scalability that Indian businesses can achieve through these investments. All that’s required now is for businesses to take action on these insights to unlock the returns that positive customer experiences can deliver,” said Vasudeva Rao Munnaluri, Regional Vice President India & SAARC, Zendesk.
The report draws on input from customers, agents, customer service leaders, and business leaders from across 21 countries. Data was also gathered from more than 97,500 Zendesk customers who participated in the company’s Benchmark program. As customers call out increased expectations and the readiness to switch after just one bad experience, the need to close the gap between these expectations and the customer experience delivered has never been more urgent. The opportunity cost for many is nothing short of revenue loss and missed opportunities for growth.
Details of the study are as follows
Consistent Truths – Customer Service Can Drive Growth
A majority of Indian businesses surveyed (88%) see a direct link between customer service and business performance compared to their counterparts in Korea (57.7%), Japan (59%), Singapore (66%) and Australia (76%). Most businesses in India (85%) estimate that customer service has a positive impact on business growth. The opportunity is not simply to deliver a single solution-based interaction with the consumer, but to use that point of engagement as an opportunity to deepen the relationship. Customer engagement is up 14% globally from the previous year, with 69% of Indian companies saying that it presented more opportunities for cross-selling.
This cuts both ways though, and the insights reveal that customer expectations can drive or stifle growth plans. As consumers spend more online, a majority say that their customer service expectations have increased in the past year. Channels play a big part in meeting these increased expectations and particularly, being where the customer is. However almost half the companies surveyed did not have a strategic plan for customer service over the immediate to medium term.
● 94% of Indian consumers say a positive customer service experience makes them more likely to make another purchase
● 99% of consumers are willing to spend more money on businesses that offer personalized and streamlined experiences
● 73% of Indian companies report having a three-year strategic plan for customer service
● 98% of Indian consumers say they are willing to spend more to buy from companies that offer them the chance to find the answers they need themselves
● Nearly half of Indian companies (46%) view CX as a revenue-generating engine for growth, while only 28% view CX as a cost centre.
The Agent X Factor
Increased expectations leads to increased pressure on agents, who act as the front line. In fact the research found that 90% of Indian organizations agree that customer service agents are essential to retaining customers.
When it comes to resolving issues, almost half the consumers surveyed worldwide are looking for agents who are helpful and empathetic. And customers will parlay this goodwill in a positive experience to being open to recommendations from service agents. Many businesses, though, have yet to recalibrate their view of customer service as a cost center. This has meant that investments in optimizing the function have not kept pace with growth, let alone with increasing customer expectations. So while a majority of businesses acknowledge customer service agents as being pivotal to driving sales, a very small number of those same agents are extremely satisfied with their workloads.
● Nearly half of consumers say that helpful and empathetic agents are what matters most when they want to resolve a customer service issue.
● 73% of APAC consumers are open to product recommendations from service agents.
● On the other hand, only 59.7% of agents in India are extremely satisfied with their workloads.
Agent empowerment is a clear focus area for 2022, as agent burnout continues to be a challenge. Nearly half (49%) of agents in India are extremely satisfied with the quality of training they receive compared to agents in Australia (10%), Japan (2.5%), Singapore (12%) and Korea (12.2%). Pair this with the fact that 89% of customers in India, 50% in Australia, 46% in Japan, 69% in Singapore and 37% in Korea feel that businesses need to improve agent training, and you have the first case for investing in what agents need. These also include better performance metrics, clear advancement opportunities and, fundamentally, more respect.
● 48% of Indian company leaders expect an increase in the amount of training offered to agents by a great extent
● 69% of Indian businesses expect to focus training their agents in providing service across multiple channels
● 68% of Indian companies plan to develop flexible work team to resolve specialized problems
Closing Gaps and Mapping Paths To Growth
Eight in ten Indian businesses view customer service as a critical business priority and only 29.5% report that it’s not owned by the C-suite. Indian businesses fared better in identifying customer service as a board-level priority compared to companies in Australia (44.9%), Japan (55.3%), Singapore (40.3%) and Korea (54.9%), where it is not owned by the C-suite. While the insights clearly indicate a business case for investments in customer experience, this isn’t necessarily being followed through with executive sponsorship or the right tools or programs, such as training for agents. Alongside this is the need for customer service metrics to be mission critical and reviewed with the appropriate frequency and gravitas. 60% of leaders say ROI has been positive over the past 12 months. However, only 23% strongly agree that customer service spending has kept pace with company growth.
The future hinges on AI and Conversational Experiences
Customers want on-demand service that’s available when they need it. 100% of Indian customers surveyed say they are willing to spend money on businesses that offer them the freedom to communicate over whatever channel they choose and don’t want to waste valuable time getting agents up to speed on their order or issue.
● 90% of Indian customers expect AI to save time when contacting a company
● 88% of Indian customers expect AI to keep them from having to repeat themselves after contacting a company for support
● 87% of Indian customers expect a majority of customer service interactions to be automated at the same time increase the quality of service
This means that businesses looking to drive and sustain growth—both now and in the future—need to focus on two emerging customer service capabilities: artificial intelligence (AI) and automation, and conversational customer service. More than half (56%) of Indian business plan to speed up adoption of AI in customer service, while 43% have already implemented conversational customer service and 38% plan to implement it in the future.
“The business case for customer service is clearer than ever and getting buy-in from the top is a critical first step. Getting this engagement relies on evolving the key metrics – look beyond CSAT and identify the broader business impact that can tell a compelling story,” McDermott adds. “This year’s findings bring into sharp focus the need for there to be a more concerted effort across the organization – including better integration of systems and a regular review of metrics. In short, let the insights lead you.”
Zendesk’s customers in India include ITC Foods, Ola, 1MG, DevFactory, Dream11, Slice, Magicbricks.com, etc. For more information, download the report, CX Trends 2022 here
Access the interactive report here
Zendesk’s 2022 CX Trends Report surveyed more than 3,511 consumers and 4,670 customer service leaders, agents and technology buyers from 21 countries and organizations ranging from small business to enterprise during July and August 2021. Results from each survey were weighted to remove bias from the survey samples.
Zendesk Benchmark product usage data came from over 97,500 Zendesk customers worldwide who participate in the Zendesk Benchmark. Zendesk Benchmark data is based on product usage from July 2020 to July 2021.